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FCA warns on boiler room graphene investments

The FCA has issued a warning to retail investors after uncovering evidence of a boiler room scheme selling investments in graphene, a new form of carbon which is currently being developed.

The regulator says it uncovered evidence of a ‘graphene investment firm’ on the computer systems of a suspected boiler room scam.

In September, the regulator issued a similar warning about the risks of investing in carbon credits. It said investors were being sold carbon credit certificates without there being a viable secondary market into which the investment could then be sold for profit.

In March, the FCA raised concerns about overseas land and crops and took court action in July after it found firms operating unregulated collective investment schemes investing in overseas crops and carbon credits. 

It says that it fears some of the firms offering those investments may have also been tempting consumers to invest in graphene.

In a note issued today, the regulator says: “We are yet to see any convincing evidence that there is a viable market for retail investors to make money from investments in rare earth metals.

“Manufacturing companies that use the metals almost always buy them in very large quantities, making it highly unlikely they will deal with small independent retail consumers.

“It has been reported to us that callers promoting investments in graphene are using dubious, high-pressure sales tactics and targeting vulnerable consumers.

“There is a strong possibility of fraud with graphene because it is unregulated and it is difficult to confirm that you have bought the genuine product.”

It adds that companies offering graphene investment are not regulated by the FCA and that any investors suffering loss will not be entitled to compensations under the FSCS. 

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